Solicitor duped by fraudster client fined by SRA
The SRA has reprimanded and fined a solicitor who inadvertently helped a client to commit theft.
The incident, which took place at the North East firm SJ Palin & Co Solicitors, caused the SRA to publish a decision notice explaining the event, rebuking the firm’s sole practitioner Mr Palin in the process.
An unnamed client had attended a walk-in appointment at Mr Palin’s firm in April 2019 and explained that he had borrowed £53,800 from his mother’s former partner and wanted to renovate and sell a property to repay the debt to him.
Mr Palin advised that a declaration of trust regarding his mother’s former partner’s share in the property should be prepared and that it should then registered against the property with HMLR. Mr Palin then carried out an identity check using the client’s passport, but did not check for evidence that he owned the property or for his client’s residential address.
A letter was sent by Mr Palin to his client’s mother’s former partner with a signed but unwitnessed declaration of trust, but upon inspection it was revealed that Palin’s client was not the owner of the property. Palin assured his client mother’s former partner that the property purchase was complete and put the discrepancy down to a time lag in updating Land Registry records.
When the declaration of trust was sent for registration it was rejected and when Palin contacted his client he received no response. In the meantime, the client’s mother’s former partner had loaned additional money based on the belief that the declaration of trust safeguarded his interests. The incident was reported to the police and Palin’s client was convicted of theft and fraud in September 2020.
Mr Palin conceded that he failed to conduct proper client ID checks and did not verify his client’s ownership of the property. Upon investigation the SRA concluded that although Mr Palin’s behaviour was reckless he did take steps to safeguard the position of his client’s mother’s former partner, and following the incident had made improvements to his client on boarding process. The incident was also found to be at a low risk of being repeated. Mr Palin was consequently ordered to pay £300 in costs to the SRA.